UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(Exact name of Registrant as Specified in Its Charter)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
At the 2023 Annual Meeting (as defined below) of Ponce Financial Group, Inc. (the “Company”), the Company’s stockholders approved the Company’s new 2023 Long Term Incentive Plan (the “2023 Plan”). Under the 2023 Plan, the Company may issue stock options, SARs, restricted stock, restricted stock units, and dividend equivalent right. The maximum number of shares of common stock to be issued under the 2023 Plan is 1,920,368; provided that the maximum number of shares that may be delivered pursuant to the exercise of stock options or SARs (all of which may be granted in the form of incentive stock options, and at least 480,092 shares of which must be premium options) is 1,371,691 and the number of shares that may be issued as restricted stock awards or restricted stock units is 548,677 without reducing available options or SARs. In the event that restricted stock or restricted stock units are awarded in excess of 548,677 shares, then the maximum number of options or SARs that can be issued is reduced by three (3) shares for each share of restricted stock or a restricted stock unit awarded in excess of 548,677 shares. If no options or SARs are issued under the Plan, a maximum of 845,877 shares in connection with restricted stock or restricted stock units could be issued. Such awards under the 2023 Plan are subject to certain other restrictions and conditions as set forth in the 2023 Plan.
The description above is qualified in its entirety by the 2023 Plan filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders
Ponce Financial Group, Inc. (NASDAQ: PDLB), the holding company for Ponce Bank held its annual stockholder meeting on June 15, 2023 (the “Annual Meeting”). The business conducted at the Annual Meeting consisted of (a) the election of three directors for a term expiring in 2026, (b) the ratification of the appointment of Mazars USA LLP as independent registered public accounting firm for the year ending December 31, 2023, (c) the approval of the 2023 Plan, (d) approval, on an advisory and non-biding basis, of the compensation of the named executive officers and (e) non-binding, advisory vote on the frequency of future advisory votes on executive. The following is a summary of the voting results for each matter presented to the stockholders:
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For |
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Abstain |
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Non-Vote |
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William Feldman |
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9,305,521 |
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6,627,646 |
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3,623,870 |
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James Perez |
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9,862,365 |
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6,071,555 |
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3,623,117 |
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Steven A. Tsavaris |
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10,194,197 |
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5,740,225 |
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3,622,615 |
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With respect to the foregoing Proposal I, each nominee was elected to the Board of Directors of Ponce Financial Group, Inc.
(b) Proposal II – Ratification of the appointment of Mazars USA LLP as Ponce Financial Group, Inc.’s independent registered public accounting firm for the year ending December 31, 2022.
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Abstain |
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18,669,471 |
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818,957 |
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68,609 |
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There were no broker non-votes.
The foregoing Proposal II was approved.
(c) Proposal III – To approve the Ponce Financial Group, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan").
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11,195,388 |
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4,692,281 |
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56,035 |
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3,613,333 |
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The foregoing Proposal III was approved.
(d) Proposal IV – Approval, on an advisory and non-binding basis, of the compensation of named executive officers.
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For |
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Against |
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Abstain |
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Non-Vote |
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11,210,757 |
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4,661,374 |
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71,573 |
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3,613,333 |
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The foregoing Proposal IV was approved on a non-binding advisory basis.
(e) Proposal V – Non-binding basis, advisory vote on the future advisory votes on executive compensation.
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1 Year |
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2 Year |
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3 Year |
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Abstain |
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Non-Vote |
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14,369,691 |
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26,978 |
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1,283,288 |
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263,747 |
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3,613,333 |
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In light of the voting results with respect to the frequency of future stockholder votes on executive compensation under Proposal V, the Company’s Board of Directors has determined that the Company will hold an annual advisory vote on executive compensation until the next required advisory vote on the frequency of the vote on executive compensation, or until the Board of Directors determines it is in the best interest of the Company to hold such vote with different frequency.
Item 8.01 Other Events.
At the Annual Meeting, Carlos P. Naudon, President and CEO of Ponce Financial Group, Inc., delivered remarks to the stockholders, which are furnished herewith as Exhibit 99.1.
The information set forth in this Item 8.01 and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
Exhibit Number |
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Description |
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10.1 |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Ponce Financial Group, Inc. |
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Date: |
June 16, 2023 |
By: |
/s/ Carlos P. Naudon |
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Carlos P. Naudon |
Exhibit 10.1
Ponce Financial Group, Inc.
2023 LONG-TERM INCENTIVE PLAN
The name of the plan is the Ponce Financial Group, Inc. 2023 Long-Term Incentive Plan (the “Plan”). The purpose of the Plan is to encourage and enable the officers, employees, consultants and Non-Employee Directors of Ponce Financial Group, Inc., a stock holding company (the “Company”) and its Subsidiaries, including Ponce Bank (the “Bank”), upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its businesses to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its shareholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
“Affiliate” means any entity that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company except in no case shall the Ponce De Leon Foundation be considered an Affiliate.
“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Performance Share Awards and Dividend Equivalent Rights.
“Award Agreement” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Agreement is subject to the terms and conditions of the Plan.
“Board” means the Board of Directors of the Company.
“Cause” means, with respect to the termination of an Employee by the Company, a Subsidiary or an Affiliate, that such termination is for “Cause” as such term (or term of like import) is expressly defined in a then-effective written employment or other agreement between the Employee and the Company, Subsidiary or Affiliate. In the absence of such then-effective written agreement and definition, “Cause” means, unless otherwise specified in the applicable Award Agreement, with respect to an Employee:
An individual shall be considered to have been discharged for Cause if the Company determines within 30 days after his or her resignation or discharge that discharge for Cause was warranted.
“Change of Control” means (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a sale of the Bank by the Company at a time when the Bank represents at least 50% of the assets of the Company, (iii) a merger, reorganization or consolidation or other business combination pursuant to which the Company is not the survivor of such merger, consolidation or other business combination or the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iv) the sale of all of the Stock of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) a change in control of the Company within the meaning of the Change in Bank Control Act, 12 U.S.C. §1817(j), a transaction that requires notice under the Rules and Regulations promulgated by the Office of the Comptroller of the Currency at 12 C.F.R. §5.50 with respect to the Bank, and a transaction that requires notice to the Board of Governors of the Federal Reserve System as required by 12 C.F.R. §§ 225.11 and 225.41(b) and (v) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company. In addition to the foregoing, and not in limitation thereof, a Change of Control shall also be deemed to have occurred if, during any period of two consecutive years, individuals who constitute the Board at the beginning of such two-year period cease for any reason to constitute at least a majority of the Board, as the case may be; provided, however, that for purposes of this sentence, an individual shall be deemed to have been a director at the beginning of such period if such individual was elected, or nominated for election, by the Board, as the case may be, by a vote of at least two-thirds of the directors who were either directors at the beginning of the two-year period or were so elected or nominated by such directors.
Notwithstanding the foregoing provisions, in no event shall a reorganization of the Company or the Bank solely within its corporate structure or a second-step conversion constitute a Change of Control for purposes of the Plan.
Notwithstanding the foregoing provisions, to the extent that any payment or acceleration hereunder is subject to Code Section 409A as deferred compensation, the term Change of Control shall mean an event described in the foregoing definition of Change of Control that also constitutes a change in control event as defined in Treasury Regulation Section 1.409A-3(i)(5).
“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
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“Committee” means the Compensation Committee of the Board (or its successor(s)), or any other Board committee designated by the Board to administer this Plan, and to the extent of any delegation by the Committee to a subcommittee pursuant to this Plan, such subcommittee. The Committee must consist of no fewer than two Directors, each of whom is (i) a “Non-Employee Director” within the meaning of Rule 16b-3 of the Exchange Act; and (ii) an "independent director" for purpose of the rules of the principal U.S. national securities exchange on which the Shares are traded, to the extent required by such rules.
“Consultant” means a consultant, advisor, or other person or entity that is not an Employee, in each case, that can be granted an Award that is eligible to be registered on a Form S-8 Registration Statement.
“Date of Grant” means the date when the Company completes the corporate action necessary to create the legally binding right constituting an Award, as provided in Code Section 409A and the regulations thereunder.
“Director” means an individual elected or appointed to the Board by the stockholders of the Company or by the Board under applicable corporate law.
“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee.
“Effective Date” means the date on which the Plan becomes effective as set forth in Section 20.
“Employee” means any individual in an employment relationship with the Company or any Affiliate. Directors who are Employees shall be considered Employees under the Plan.
“Fair Market Value” on any date means the market price of a share of Stock:
The Committee’s determination of Fair Market Value shall be conclusive and binding on all persons.
“Good Reason” means, with respect to the resignation of an Employee, that such resignation is for “Good Reason” as such term (or term of like import) is expressly defined in a then-effective written employment or other agreement between the Employee and the Company, a Subsidiary or an Affiliate. In the absence of such then-effective written agreement and definition, “Good Reason” means the occurrence
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of any of the following events, except for the occurrence of such an event in connection with the termination or reassignment of the Employee by the Company, a Subsidiary, or an Affiliate for Cause:
(a) a material reduction of an Employee’s annual compensation, including, but not limited to, base salary, awards, bonuses, retirement benefits, perquisites or any other item of compensation;
(b) a material reduction in the Employee’s authority, duties and responsibilities, provided, however, that Good Reason shall not be considered to occur solely because an Employee’s authorities, duties or responsibilities, and position are reallocated to other Employees based on a good faith determination by the Company, a Subsidiary or an Affiliate that such reallocation is necessary in order for the Company, Subsidiary, or Affiliate to adequately address growth, acquisitions or expansion or changes of the business of the Company, Subsidiary, or Affiliate; or
“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.
“Non-Employee Director” means a Director who is not also an Employee.
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.
“Performance-Based Award” means any Restricted Stock Award or Restricted Stock Units subject to Section 9.
“Performance Criteria” means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle. The Performance Criteria (which shall be applicable to the organizational level specified by the Committee, including, but not limited to, the Company or a unit, division, group, of the Company, or any Affiliate or Subsidiary) that will be used to establish Performance Goals include, but are not limited to, the following: total shareholder return; net income (loss) (either before or after interest, taxes, depreciation and/or amortization); changes in the market price of the Stock; economic value-added; acquisitions or strategic transactions; operating income (loss); return on capital, assets, equity, or investment; expense; margins; operating efficiency; customer satisfaction; earnings (loss) per share of Stock; market shares and number of customers; any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Committee may appropriately adjust any evaluation performance under a Performance Criterion to exclude any of the following events that occurs during a Performance Cycle: (i) asset write-downs or impairments, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reporting results, (iv) accruals for reorganizations and restructuring programs, and (v) any item of an unusual nature or of a type that indicates infrequency of occurrence, or both, including, among others, those described in management’s discussion and analysis of financial condition of operations appearing in the Company’s annual report to
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shareholders for the applicable year and/or in the Financial Accounting Standards Board’s authoritative guidance.
“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Stock Award, Restricted Stock Units, or Performance Share Award, the vesting and/or payment of which is subject to the attainment of one or more Performance Goals. Each such period shall not be less than 12 months.
“Performance Goals” means, for a Performance Cycle, the specific goals established in writing by the Committee for a Performance Cycle based upon the Performance Criteria.
“Premium Exercise Price” means the exercise price, which shall be set at a premium in excess of the Fair Market Value on the Date of Grant, for the purchase of shares of Stock under a Premium Option, as described in Section 5(d) herein.
“Premium Option” means an option to purchase shares of Stock at a Premium Exercise Price, as described in Section 5(d) herein.
“Restricted Shares” means the shares of Stock underlying a Restricted Stock Award that remain subject to a risk of forfeiture or the Company’s right of repurchase.
“Restricted Stock Award” means an Award of Restricted Shares subject to such restrictions and conditions as the Committee may determine at the time of grant.
“Restricted Stock Unit” means an Award consisting of a bookkeeping entry representing the right to receive one share of stock and representing the unfunded and unsecured obligation of the Company subject to such restrictions and conditions as the Committee may determine at the time of grant.
“Sale Price” means the value as determined by the Committee of the consideration payable, or otherwise to be received by shareholders, per share of Stock pursuant to a Change of Control.
“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
“Stock” means the Common Stock, par value $0.01 per share, of the Company, subject to adjustments pursuant to Section 3.
“Stock Appreciation Right” or “SAR” means an Award entitling the recipient to receive an amount equal to the difference between the Fair Market Value of a share of Stock at the time of exercise of the SAR and the exercise price.
“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50% interest, either directly or indirectly.
“Ten Percent Owner” means an Employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.
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All decisions and interpretations of the Committee shall be binding on all persons, including the Company and Plan grantees.
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Grantees under the Plan will be such Employees, Non-Employee Directors, or Consultants of the Company, its Subsidiaries, or Affiliates as are selected from time to time by the Committee in its sole discretion.
Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to Employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.
Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable, which may differ among individual Awards and grantees. If the Committee so determines, Stock Options may be granted in lieu of cash
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compensation at the optionee’s election, subject to such terms and conditions as the Committee may establish.
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Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his or her stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Agreement or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.
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To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Committee from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.
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The Board may, at any time, amend or discontinue the Plan and the Committee may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in Section 12, without prior shareholder approval, in no event may the Committee exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing through cancellation and re-grants or cancellation of Stock Options or Stock Appreciation Rights in exchange for cash or other Awards. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Committee to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, Plan amendments shall be subject to approval by the Company shareholders entitled to vote at a meeting of shareholders. Nothing in this Section 17 shall limit the Committee’s authority to take any action permitted pursuant to Section 12.
With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Committee shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.
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This Plan shall become effective upon shareholder approval in accordance with applicable law, the Company’s bylaws and articles of incorporation, and applicable stock exchange rules. No Awards may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board.
This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of New York, applied without regard to conflict of law principles.
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Exhibit 99.1
REMARKS OF CARLOS P. NAUDON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PONCE FINANCIAL GROUP, INC. AND PONCE BANK
THE 2023 ANNUAL SHAREHOLDERS’ MEETING
PONCE FINANCIAL GROUP, INC.
June 15, 2023
DEAR SHAREHOLDERS, DIRECTORS, COLLEAGUES, AND FRIENDS:
IT IS AN HONOR TO ADDRESS YOU TODAY AS THE PRESIDENT AND CEO OF PONCE FINANCIAL GROUP AND PONCE BANK. EACH YEAR FOR THE PAST SEVERAL, I HAVE TAKEN THIS OPPORTUNITY TO LAY OUT OUR PLANS TO DO WELL WHILE ALSO DOING GOOD. I HAVE TALKED ABOUT OUR MISSION, OUR VISION, OUR VALUES, AND FOR THE PAST FEW YEARS, I HAVE DESCRIBED HOW OUR TEAM OF PONCE BANKERS HAVE NAVIGATED UNPRECEDENTED TIMES WITH PASSION, DEDICATION, PERSEVERANCE . . . AND WITH GREAT SUCCESS.
A FEW MONTHS AGO, I LOOKED FORWARD TO THIS DAY, THINKING THAT PERHAPS WE WERE DONE DISCUSSING INTERESTING AND UNPRECEDENTED TIMES. THE PANDEMIC WAS FADING, AND WE WERE WELL PREPARED TO MOVE FORWARD, HAVING SOLIDIFIED OUR POSITION AS A LITERAL BEDROCK FOR THE COMMUNITIES WE SERVE. WE HAD EFFECTIVELY AND PROFITABLY EXECUTED OUR UNPRECEDENTED PPP MISSION AND PUT FUNDS INTO THE HANDS OF NEARLY 6,000 SMALL BUSINESSES WHILE HELPING TO PRESERVE THOUSANDS OF JOBS. WE HAD CONCLUDED OUR SECOND STEP CONVERSION, ADDING 170 MILLION DOLLARS TO OUR CAPITAL BASE, THUS POSITIONING US FOR SUSTAINABLE GROWTH. AND WE HAD GREATLY EXPANDED OUR COMMUNITY OUTREACH, THROUGH DOZENS OF GRANTS, PARTNERSHIPS, AND PARTICIPATIONS, THUS CEMENTING OUR REPUTATION AS YOUR COMMUNITY BANK.
YES, A FEW MONTHS AGO I WAS PREPARED TO TELL YOU THAT WE HAD MADE ALL THE RIGHT MOVES ... THAT WE WERE WELL POSITIONED TO MOVE FORWARD INTO A BRIGHT FUTURE THAT THE DIFFICULTIES IN OUR COMMUNITIES HAD FADED ... AND THAT WE WERE MOVING FORWARD EXACTLY ACCORDING TO PLAN.
TODAY? A FEW MONTHS LATER? WELL, SAY HELLO TO PLAN B. YES, PLAN B. BUT, WHAT I AM HAPPY TO REPORT ABOUT PLAN B, THOUGH, IS THAT IT APPEARS THAT WE HAVE MADE ALL THE RIGHT MOVES, AND THAT WE ARE WELL POSITIONED TO MOVE FORWARD INTO A BRIGHT FUTURE. IN FACT, PLAN B LOOKS QUITE A LOT LIKE PLAN A. THE ONLY DIFFERENCE IS THAT PLAN B ADDRESSES A NEW SET OF DIFFICULTIES THAT HAVE EMERGED A FEW NEW CHALLENGES THAT HAVE EMERGED. CHALLENGES THAT THIS TIME ARE AFFECTING A SLIGHTLY DIFFERENT COMMUNITY, OUR OWN COMMUNITY ... THE COMMUNITY OF MISSION DRIVEN BANKS ... THE COMMUNITY OF MISSION DRIVEN BANKERS ... THE PEOPLE AND INSTITUTIONS WHO HAVE CHOSEN TO NAVIGATE A MORE NUANCED PATH . . . A PATH THAT SEEKS TO PROFIT NOT AT THE EXPENSE OF OTHERS, BUT FOR THE BENEFIT OF OTHERS A PATH TO PURPOSE-LED PROFIT.
THAT IS OUR PATH ... A PATH THAT IS INCREASINGLY BEING RECOGNIZED AND SUPPORTED BOTH ON MAIN STREET AND ON WALL STREET. IT IS BEING RECOGNIZED BY EMERGING PRACTICES OF TRIPLE-BOTTOM-LINE ACCOUNTING AND ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING. IT IS BEING RECOGNIZED BY A HUGE EXPANSION OF INVESTORS INTERESTED IN LONGER-TERM, MORE SUSTAINABLE BUSINESS STRATEGIES.
AND THIS RECOGNITION IS ACCOMPANIED BY THE REALIZATION THAT WE NEED TO REVERSE DECADES OF WEALTH CONCENTRATION TO CREATE A MORE JUST AND FAIR FUTURE FOR OUR CHILDREN AND OUR CHILDREN’S CHILDREN. THIS RECOGNITION IS ALSO ACCOMPANIED BY THE REALIZATION THAT WE NEED TO REVERSE DECADES OF ENVIRONMENTAL NEGLECT AND DESTRUCTION – LEST WE IGNORE LAST WEEK’S CLIMATE DEBACLE RIGHT HERE IN NEW YORK CITY – FOR WE NEED A SUSTAINABLE FUTURE FOR OUR CHILDREN AND OUR CHILDREN’S CHILDREN.
PURPOSE-LED PROFITS IS OUR PATH, AND I THANK YOU FOR JOINING US IN OUR EFFORTS TO SERVE THE UNDERSERVED AND UNDERBANKED COMMUNITIES.
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NOW LET ME TAKE A FEW MINUTES TO SHARE SOME OF THE HIGHLIGHTS AND CHALLENGES WE FACE ALONG THE WAY TO OUR PURPOSE-LED FUTURE.
I WILL START WITH OUR BIGGEST HIGHLIGHT. LAST WEEK, THE NATIONAL COMMUNITY INVESTMENT FUND ISSUED ITS CDFI BANKING INDUSTRY PEER GROUP REPORT. I AM PLEASED TO TELL YOU WHAT THEY REPORTED:
WE ARE EXTREMELY PROUD OF OUR PERFORMANCE; OUR TEAM IS AWESOME!
AS YOU KNOW, OUR CDFI AND MDI STATUS, AND OUR PERFORMANCE THEREUNDER, PROVIDES US WITH MANY OPPORTUNITIES MANY OPPORTUNITIES. THE VALUE OF THESE CERTIFICATIONS WAS MOST EVIDENT WHEN LAST YEAR WE RECEIVED A 225 MILLION DOLLAR INFUSION OF CAPITAL THROUGH THE EMERGENCY CAPITAL INVESTMENT PROGRAM OF THE U.S TREASURY DEPARTMENT, KNOWN AS ECIP.
AND, IT DOES NOT END WITH ECIP. SO FAR THIS YEAR, OUR CDFI AND MDI CERTIFICATIONS HAVE EARNED US A 3.7 MILLION DOLLAR GRANT, THROUGH THE EQUITABLE RECOVERY PROGRAM, REFERRED TO AS THE ERP. WE HAVE APPLIED FOR A GRANT UNDER THE ANNUAL BANK ENTERPRISE AWARD PROGRAM. WE RECEIVED FIRST-TIME HOME-BUYER GRANTS THROUGH THE FEDERAL HOME LOAN BANK OF NEW YORK. AND WE WERE APPROVED BY NEW YORK STATE TO PARTICIPATE IN A NUMBER OF SUBSIDIZED PROGRAMS FOCUSED ON SMALL AND MINORITY OWNED BUSINESSES. THESE AND OTHER GRANTS FLOW IN RECOGNITION OF OUR UNIQUE ABILITY TO DEPLOY FUNDS IN AREAS OF GREATEST NEED. AND THEY FLOW IN RECOGNITION OF OUR ABILITY TO EXECUTE THIS MISSION, RESPONSIBLY, EQUITABLY, AND PROFITABLY.
GIVEN THE IMPORTANCE OF OUR CDFI STATUS, I’M HAPPY TO REPORT THAT JUST A FEW WEEKS AGO THE CDFI FUND OF THE U.S. TREASURY DEPARTMENT CERTIFIED THE PONCE FINANCIAL GROUP AS A CDFI AND RE-CERTIFIED PONCE BANK AS A CDFI. THE CERTIFICATIONS ENSURE THAT THESE PROGRAMS AND OTHERS WILL KEEP FUNDS FLOWING THROUGH US, AND, MOST IMPORTANTLY, INTO OUR COMMUNITIES, FOR MANY YEARS TO COME. AND, FOR THE BENEFIT OF COMMON SHAREHOLDERS.
NOW, LET ME ADDRESS THE ELEPHANT IN THE ROOM. THE SIMMERING BANKING CRISIS.
IN ITS RAPID AND RELENTLESS EFFORTS TO TAME INFLATION, THE FED HAS RAISED INTEREST RATES BY NEARLY 500 BASIS POINTS OVER THE PAST 6 MONTHS. HIGHLY UNPRECEDENTED AND, IN SOME CIRCLES, NOT ENTIRELY ACCEPTED AS NECESSARY.
THESE FED MOVES LEAD US AGAIN INTO UNPRECEDENTED TERRITORY. AFTER OVER A DECADE OF LOW RATES AND EASY MONEY, THESE INCREASES SUDDENLY PUT THE SQUEEZE ON NET INTEREST MARGINS THROUGHOUT THE BANKING INDUSTRY. THE RATE INCREASES HAVE LEFT LARGE TRANCHES OF INVESTMENTS THAT PREVIOUSLY LOOKED SAFE, SENSIBLE AND CONSERVATIVE, IN FACT, HIGHLY UNDERWATER. THESE RATE INCREASES HAVE PROVED CRIPPLING WHEN BANKS, FACING LIQUIDITY CHALLENGES, ARE FORCED TO SELL THESE INVESTMENTS AT MASSIVE LOSSES. WE KNOW SUCH EVENTS SENT DEPOSITORS AND INVESTORS RUNNING OUT THE DOOR AT THREE OF OUR NATION’S LARGEST BANKS. AS YOU KNOW, THAT LED TO THE FORCED REGULATORY TAKEOVERS OF SILICON VALLEY AND SIGNATURE BANKS, AND A HASTY SALE OF FIRST REPUBLIC BANK. EMERGENCY MOVES BY THE FDIC MADE DEPOSITORS WHOLE, BUT INVESTORS HAVE NOT BEEN SO LUCKY. BANKING STOCKS HAVE SUFFERED OVER THE PAST SEVERAL MONTHS. THE NORTHEAST REGIONAL BANK INDEX IS DOWN OVER 30 PERCENT. BANK OF AMERICA IS DOWN ALMOST 50 PERCENT SINCE JANUARY OF 2022.
OUR STOCK, HOWEVER, HAS RECENTLY REBOUNDED IN RECOGNITION OF THE FACT THAT, AS I MENTIONED AT THE BEGINNING OF MY REMARKS, WE HAVE BEEN MAKING ALL THE RIGHT MOVES. ALTHOUGH OUR MARGINS
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ARE SQUEEZED LIKE EVERYBODY ELSE’s, WE FIND OURSELVES FUNDAMENTALLY SOUND IN A NUMBER OF WAYS. I WILL BEGIN BY NOTING THAT WE HOLD ONLY A SMALL PERCENTAGE OF OUR INVESTMENTS IN THE TYPES OF SECURITIES THAT THESE FAILED BANKS WERE FORCED TO SELL. ... SO, WE HAVE NOT AS MUCH EXPOSURE ON THAT FRONT. IN TERMS OF LIQUIDITY, WE HAVE ENOUGH TO COVER OUR CURRENT UNINSURED DEPOSITS WELL OVER TWO TIMES. WE HAVE NO EXPOSURE TO CRYPTO AND OUR DEPOSITOR BASE IS WELL DIVERSIFIED.
WE ALSO ENJOY A LOYAL AND TRUSTING DEPOSIT BASE. I AM HAPPY TO REPORT THAT WE SAW NO DISCERNABLE OUTFLOW OF DEPOSITS DURING THE HEAT OF THE CRISIS. IN FACT, WE BENEFITED FROM SEVERAL MILLION DOLLARS OF INFLOWS THAT WE ATTRIBUTE TO THOSE LEAVING FAILED AND ENDANGERED BANKS.
HAPPILY, OUR LOAN PIPELINE IS FULL, AND WE CONTINUE TO BOOK MANY HIGH VALUE, LOW LTV CONSTRUCTION AND MULTI-FAMILY RESIDENTIAL LOANS. THIS HELPS US STABILIZE OUR MARGINS DESPITE THE SQUEEZE.
ON TOP OF ALL THIS, OUR STOCK REPURCHASE PROGRAM IS HIGHLY ACCRETIVE TO BOOK VALUE. AND, OF COURSE, OUR ENTRY INTO THE RUSSELL INDEXES ALSO PROVIDES AN UPDRAFT TO OUR STOCK PRICE.
IT IS NOT THAT WE ARE UNAFFECTED BY TODAY’S BANKING CLIMATE. RATHER, IT IS BECAUSE WE HAVE MITIGATED MUCH OF THE RISK THROUGH SOUND PRACTICES AND SERENDIPITY. BY STAYING THE COURSE, WE FIND THE WORLD CATCHING UP TO OUR MISSION, AND WE BELIEVE THIS WILL REWARD US WITH HEALTHY MARGINS OVER THE LONG TERM.
AS PART OF THIS LONG-TERM PATHWAY TO SUCCESS WITH PURPOSE-LED PROFITS, WE CONTINUE TO INVEST IN INFRASTRUCTURE, ANTICIPATING THE GROWTH THAT WILL BE FUELED BY OUR GREATLY EXPANDED CAPITAL BASE. WE ARE BELT TIGHTENING TOO. REDUCING NON-INTEREST EXPENSES HAS BEEN MADE A MANDATE TO ALL OF OUR MANAGERS ACROSS THE BOARD. BUT WE CONTINUE TO INVEST IN OUR BRANCHES, IN OUR PEOPLE, AND IN OUR TECHNOLOGY SO THAT WE ARE PREPARED TO SUCCEED TODAY AND FAR INTO THE FUTURE.
ON THE TECHNOLOGY FRONT, WE RECENTLY STARTED THE AUTOMATION OF OUR LENDING PROCESSES USING A NEW COMMERCIAL LOAN ORIGINATION SYSTEM. IT IS INTEGRATED WITH OUR SALESFORCE APPLICATION AND OUR CORE BANKING SYSTEM. WE ARE LIKEWISE INTEGRATING THE 1-4 FAMILY RESIDENTIAL LOAN ORIGINATION PLATFORM THAT IS USED BY OUR MORTGAGE WORLD BANKERS’ DIVISION. THESE MOVES EMPOWER OUR TEAM TO USE SALESFORCE MARKETING CLOUD TO AUTOMATE ONBOARDING JOURNEYS, AND BUILD DEEPER RELATIONSHIPS WITH OUR CUSTOMERS THROUGH DATA-INFORMED CROSS-SELLING. THESE INTEGRATIONS, AND OUR TECHNOLOGICAL INVESTMENTS, MEAN THAT WE CAN ENGAGE IN RELATIONSHIP BUILDING INTERACTIONS THAT EXPAND OUR GOAL OF PROVIDING CONCIERGE LEVEL SERVICE TO CUSTOMERS MOST BANKS IGNORE. AND OUR GOAL OF TREATING EVERY CUSTOMER AS IF THEY ARE OUR BEST CUSTOMER.
THESE INVESTMENTS ARE CONSIDERABLE BUT HIGHLY NECESSARY FOR OUR FUTURE SUCCESS. WITH THEM, WE ARE BUILDING PONCE’S FUTURE.
AND THAT BRINGS ME BACK TO OUR MISSION.
FOR DECADES WE HAVE NEVER WAVERED AND TODAY WE ARE SEEING A PERFECT CONFLUENCE OF OUR MISSION WITH THE EMERGING VALUES OF THE WORLD AROUND US. THE NEED FOR AN EQUITABLE BANKING ENVIRONMENT HAS ELEVATED OUR VISIBILITY AND OUR VIABILITY. THE NEED FOR THE TARGETED DEPLOYMENT OF FUNDS, FINANCIAL EDUCATION INITIATIVES, AND COMMUNITY ENGAGEMENT, THAT BANKS LIKE PONCE BANK ADDRESS, HAS NEVER BEEN GREATER OR MORE EVIDENT. AND YET WE CONTINUE TO HEAR RECKLESS TALK ABOUT INSTITUTIONS THAT ARE “TOO BIG TO FAIL” . . . BANKS THAT ARE “SYSTEMICALLY IMPORTANT.” AND BANKS THAT ARE NOT.
WHAT PONCE BANK HAS PROVEN OVER THE PAST 63 YEARS, AND MORE URGENTLY OVER THE PAST FEW MONTHS, IS THAT COMMUNITY BANKING IS NOT SIMPLY “SYSTEMICALLY IMPORTANT” . . . COMMUNITY BANKING BY MDIs AND CDFIs IS IN FACT “SYSTEMICALLY CRITICAL.” LET ME EMPHASIZE, WE ARE SYSTEMICALLY CRITICAL TO OUR COMMUNITIES, WHERE ALL TOO OFTEN WE ARE THE ONLY BANKING PROVIDER. IN FACT, RESEARCH CONDUCTED BY JOHNS HOPKINS UNIVERSITY IDENTIFIED 147 ZIP CODES IN THE COUNTRY WHERE THE ONLY BANK SERVING IT WAS AN MDI BANK. MDIs AND CDFIs ARE SYSTEMICALLY CRITICAL TO OUR COMMUNITIES.
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CRA WAS ENACTED TO ENSURE THAT FINANCIAL SERVICES ARE WIDELY AND EQUITABLY DISTRIBUTED. PONCE BANK AND OUR FELLOW MDI AND CDFI BANKS LIVE AND BREATHE THIS REALITY DAILY. WE DO IT ON THE STREETS OF OUR COMMUNITIES. WE DO IT IN THE STOCKROOMS OF MOM-AND-POP STORES, AND WE DO IT ON FACTORY FLOORS. WE DO IT ON MAIN STREET, WE DO IT ON WALL STREET, WE DO IT IN IMMIGRANT COMMUNITIES THROUGHOUT OUR AREA, AND WE DO IT IN EL BARRIO. IN EL BARRIO, AS WE DID LAST WEEKEND FOR THE 116THSTREET FESTIVAL AND THE PUERTO RICAN DAY PARADE! AND AT THE GREEK FESTIVAL IN GLEN COVE IN SUPPORT OF A BELOVED LOCAL INSTITUTION.
MDI AND CDFI BANKS DO IT FOR OUR SMALL BUSINESSES, FOR OUR FRONT-LINE WORKERS, FOR OUR IMMIGRANTS, AND FOR THEIR SONS AND DAUGHTERS. WE EMBODY AND ENABLE THE AMERICAN DREAM.
PONCE BANK WAS FOUNDED IN THE BRONX IN 1960 AND TODAY, AS WE HAVE SAID, WE ARE IN THE COMMUNITY, WE ARE OF THE COMMUNITY AND WE ARE FOR THE COMMUNITY.
LET ME REPEAT THAT. WHEN IT COMES TO COMMUNITIES OF COLOR AND IMMIGRANTS, WE ARE IN THE COMMUNITY, WE ARE OFTHE COMMUNITY AND WE ARE FOR THE COMMUNITY.
THANK YOUFOR BEING A PART OF HOW A COMMUNITY WORKS. THANK YOU ALL FOR BEING A PART OF HOW AN MDI AND CDFI BANK WORKS. AND THANK YOU FOR ENABLING US TO CARRY OUT OUR MISSION!
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Document And Entity Information |
Jun. 15, 2023 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Jun. 15, 2023 |
Entity Registrant Name | Ponce Financial Group, Inc. |
Entity Central Index Key | 0001874071 |
Entity Emerging Growth Company | false |
Securities Act File Number | 001-41255 |
Entity Incorporation, State or Country Code | MD |
Entity Tax Identification Number | 87-1893965 |
Entity Address, Address Line One | 2244 Westchester Avenue |
Entity Address, City or Town | Bronx |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10462 |
City Area Code | 718 |
Local Phone Number | 931-9000 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common stock, par value $0.01 per share |
Trading Symbol | PDLB |
Security Exchange Name | NASDAQ |
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